The International Labour Organization estimates that 73.4 million people aged 15-24 do not have a job (43% of global youth), and three times as many young people are underemployed. At the same time, 40% of employers report skills shortage for entry level vacancies, according to McKinsey (Social Initiative 2015). Hence, skill gaps have become an issue to both employers and the unemployed. This trend is exacerbated by technological advancements which are rapidly replacing manual jobs, leaving millions of young people unprepared to participate in the 21st-century knowledge economy.
Three aspects of the skills gap problem need to be addressed in order to find a sustainable solution: urgency, proficiency in technology, and job market readiness. The 2016 World Development Report finds that returns to education are particularly high for ICT-intensive occupations. The wage premium for working in ICT-intensive occupations is around 5% for both men and women in developing countries (WDR 2016). This suggests a tremendous potential of technology education for reducing poverty and boosting prosperity in the developing world.
In the 1990s and early 2000s, the World Bank Group and other development partners actively promoted the mobile revolution, opening up telecommunication sectors that were largely monopolistic and state-owned. The mobile phone, which was seen initially as a luxury good, became a key driver of growth and social inclusion in Africa, South Asia and throughout the world.
This post is the first in a series about the Principles for Digital Development. Future entries will unpack the individual Principles through case studies of successes and failures.
The World Bank recently endorsed the Principles for Digital Development, a set of nine evolving guidelines to help practitioners integrate technologies in development projects. With this endorsement, the Bank joins dozens of development organizations including DFID, USAID, and UNICEF in recognizing the importance of supporting technologies in operations through human-centered, contextually appropriate, collaborative, safe, and sustainable design.
These Principles seek to mitigate challenges that pervade the digital development ecosystem: an abundance of pilot projects that rarely scale, redundant and bespoke tools built in silos, rigid program design and implementation, and a lack of coordination among stakeholders, to name a few. The Bank’s endorsement of the Digital Principles reflects a commitment to support and implement ICTs in a way that avoids these trappings and furthers its twin goals of boosting shared prosperity and eradicating extreme poverty by 2030.
Why is the Bank endorsing these Principles?
The Bank endorses these Principles partly because they align closely with key recommendations from the 2016 World Development Report. While recognizing the potential of ICTs to support development outcomes, the report urges us to think carefully about the analog elements surrounding a digital deployment. Several Digital Principles reflect this concern, reminding practitioners to devote time to understanding the ecosystem in which a technological intervention is implemented, to think pragmatically about sustainability plans, and to address privacy and security.
In recent decades, India’s growth story has been difficult to ignore. And the Indian technology revolution, a key contributor to this growth, has been remarkable. The information technology industry contributes to nearly 9.5% of India’s GDP and is the largest private sector employer, generating some 3.5 million direct jobs, and over 10 million indirect jobs.
However, the dividends of India’s digital growth have been unevenly realized, providing lots of opportunities for improvement, including:
- Mobile penetration in India is still relatively low. India’s rural populace makes up approximately 68% of the population but account for just over 40% of its mobile users.
- India ranked 156th in the world in terms of broadband penetration (at over 19%) as per the UN Broadband Commission report released in 2015.
- Roughly nine out of 10 workers are informally employed and lack social protection. Most workers lack adequate education or skills and the educated youth faces high unemployment rates.
Population that cannot afford Broadband
Having a formally recognized form of identity provides the poor and vulnerable with the opportunity to climb out of poverty. This is critical for achieving a wide range of development outcomes: from opening a bank account and paving the way for broader financial inclusion to accessing education services, tracking childhood vaccinations, and empowering women. It can also strengthen the efficiency and effectiveness of the state in providing critical services, such as government to person (G2P) payments, and reduce unnecessary waste of resources through better targeting.
With the advances in technology including biometrics, data management, and the ubiquity of mobile connectivity, there is an unprecedented opportunity to deliver services faster and more efficiently than ever before. And a country like India has also shown how, with these advances, a unique identity can be done at a scale not previously possible.
To reach the transformational potential of digital identification, the World Bank Group launched the Identification for Development (ID4D) initiative to support progress towards identification systems using 21st century solutions. We are shaping country priorities through technical assistance, financial support and global expertise. At present we are engaged with approximately 20 countries – either supporting through financial and technical advice, or through our assessment to determine gaps and help develop a forward looking roadmap.
The industry representatives, government officials, and other participants in Barcelona are all convinced of the importance of the internet and mobile to improve the lives and prospects of people around the world. But many outside our technophile world do not share this view. They do not see how phone or internet connections relate to poverty reduction.
In developing countries, the typical challenge is not to convince the Minister of ICT, but rather the Ministers of Economy and Finance and the development partners of the importance of a technology strategy. Few international financial institutions or donor agencies focus their resources on the digital economy or ICT. Over the last ten years official development assistance from OECD members (ODA) to the communication technologies sector has hovered around a low 0.5% of total ODA.
A widely held view is that the private sector can take care of financing needs. Yet, the ITU has estimated the bill to bring the entire world online by the year 2020 at around US$500 billion. And the private sector is unable, or unwilling, to provide, unassisted, these huge sums of investment.
In many developing countries, especially small countries, landlocked and fragile states, as well as rural areas, the private sector views financial and operating risks as too high, in particular in view of market size. In these frontier markets, the private sector will only take the lead in expanding connectivity if governments establishes a conducive investment climate and offers risk sharing, investment sharing and other innovative business models. One such business model is the guaranteed prepurchase by government of connectivity capacity to meet the future needs of public services, including as local government, citizen outreach, school, health and agricultural extension services.
A new assessment of energy use in Nairobi and Accra shows that measuring and sharing data would improve life for people in both capitals by increasing energy access and efficiency.
The key is access to information. Releasing energy information such as data on power networks, energy usage and on the potential to switch to renewables could mean more efficient development and improved services for consumers. Access to data could bring many positive changes. It could speed up private sector and civil society engagements in the energy sector. For example, wind power companies could benefit from digital power network and wind resource data to find new markets. Or NGOs providing solar lamps for students could better target their operations by getting access to maps of off-grid communities and schools.
When I started working on energy access and biomass in Mozambique in 2007, the concept of “open data” wasn’t even on my radar. But the practical implications of not having that information was an everyday frustration. My colleagues in the Ministry of New and Renewable Energies and I would spent days searching for numbers we needed on basic trends, like key information on charcoal prices, with little success. For urgent needs, we would spend considerable amounts of time visiting line-ministries and other partners to see if we could pool our talents to come up with somewhat accurate data. And this was for truly basic information, for a picture, say, of biomass consumption in Sofala province, or a number for improved cookstoves in use across Mozambique. Back then, we couldn’t even imagine a national online portal that would publish all our missing data points in an easily accessible format. But the high cost of data gaps were apparent even then.
The 2016 World Development Report on “Digital Dividends” paints a clear picture of the remaining digital gap and of the barriers that are keeping countries from reaping the dividends associated with the digital revolution. One of the key points that the report makes is that, for digital technologies to benefit everyone everywhere, affordable access to high-speed internet is key.
- The quality and price of high-speed internet access still varies widely from country to country. For instance, the report shows that users in Pakistan pay less than US$1.50 per month per GB of mobile internet. But users in Africa can pay up to ten times that amount. These differences arise from policy failures as much as from differences in countries’ natural endowments.
- There is a need to enhance fixed broadband infrastructure. While mobile broadband has helped fill the gap for high-speed Internet access in developing countries, small screen devices are not necessarily suitable for running a digital business and mobile networks still need strong backhaul infrastructure.
- There is also a need to strengthen analog complements to digital technologies, such as regulations that create a vibrant business climate and skills that let firms leverage digital technologies to compete and innovate.
The 2016 World Development Report: Digital Dividends, the World Bank’s flagship report launched on 14 January 2016, presents a policy framework to assist governments in making the best use of information and communication technologies (ICTs) for development. Specifically, the policy framework, presented on the page 206 of the report, shows how policy interventions in the areas of market competition, public private partnership and effective regulation can help in addressing the digital divide and enhancing connectivity. The policy framework is structured around actions in the first mile, middle mile and last mile of the network as well as in the intangible parts, labelled the “invisible mile” (see “How networks are built”).